Year-End Tax Moves for 2025 — Smart Strategies to Cut Your Tax Bill Before December 31
The end of the year isn’t just for holiday shopping—it’s your last chance to shop for tax savings.
Many of the best tax strategies vanish at midnight on December 31, 2025. With smart planning, you can reduce this year’s tax bill, set yourself up for a stronger 2026, and take advantage of deductions that may not be around forever.
Here’s a rundown of the top year-end tax moves for 2025—what’s new, what’s ending, and how to act before time runs out.
What’s New in 2025 That Impacts Year-End Planning
Extra $6,000 Standard Deduction for Seniors (65+): Extended under the One Big Beautiful Bill Act (OBBBA), available through 2028.
New “Below-the-Line” Deductions: Unique 2025 write-offs now available, including tips, overtime premiums, and interest on U.S.-assembled car loans.
SALT Deduction Cap Increase: Itemizers can now deduct up to $40,000 in state and local taxes (phasing out for high-income households).
Bonus Depreciation Restored: 100% bonus depreciation is back for qualifying business assets placed in service after Jan 19, 2025.
Core Year-End Moves (Individuals & Families)
Max Retirement Contributions:
401(k): Up to $23,000 (plus $7,500 catch-up if 50+).
IRA: Up to $7,000 (plus $1,000 catch-up if 50+).
HSA: $4,300 (self-only), $8,550 (family), +$1,000 catch-up if 55+.
Prepay State/Local Taxes or Property Taxes: Use the higher SALT cap before it potentially sunsets in 2026.
Use It or Lose It with FSAs: Spend down Flexible Spending Accounts or Dependent Care FSAs before year-end to avoid forfeiture.
Bunch Charitable Giving: Combine multiple years’ donations into 2025 to exceed the standard deduction and maximize itemization.
Core Year-End Moves (Business Owners)
Leverage Section 179 & Bonus Depreciation: Buy and place in service equipment, software, or qualified property before year-end to claim immediate deductions.
Defer Income, Accelerate Expenses: If your 2025 income is unusually high, defer invoices or contracts into January while accelerating deductible expenses into December.
Review Payroll & Contractor Payments: Make sure 1099s and W-2s are ready—clean books now mean fewer headaches in January.
Consider Retirement Plan Setup: Establish a Solo 401(k) or SEP IRA before Dec 31 to unlock tax-advantaged contributions.
Why These Moves Matter
Lower your 2025 tax liability before deadlines hit.
Improve cash flow by deferring tax into future years.
Capitalize on temporary opportunities (like bonus depreciation and expanded deductions) that may not last.
Set yourself up for 2026 with a cleaner tax picture and fewer surprises.
The clock is ticking on 2025. Smart year-end moves can shrink your tax bill and put money back in your pocket—but only if you act before December 31.
Want a personalized year-end tax strategy to maximize deductions for your situation?
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1. Can I contribute to my HSA in 2026 for 2025?
Yes—HSA contributions for 2025 can be made up until April 15, 2026.2. Should I prepay property tax for 2026?
It may help in 2025, especially with the $40,000 SALT cap, but watch out for AMT and check state rules.3. Do retirement contributions need to be made by Dec 31?
Employer plan deferrals (401(k), 403(b)) must be made by year-end. IRA contributions can be made up until April 15, 2026.4. What happens if I buy equipment in December but don’t use it until January?
It must be placed in service in 2025 to qualify for Section 179 or bonus depreciation this year.5. Will the senior extra $6,000 deduction continue after 2025?
Yes—under OBBBA, it’s extended through 2028.
